Consumers Should Tailor Insurance Needs to Travel Plans

News of reduced schedules, staff cutbacks and flight cancellations has many holiday travelers on edge. But the right financial protections can ease vacationers' concerns about whether they'll reach their destinations.

Travel insurance can guard against the uncertainties of today's rapidly-changing airline schedules.

Basic trip insurance protects against the cancellation of a trip due to medical emergencies, bankruptcy of an airline, cruise line or tour operator, severe weather and jury duty or armed forces call-up. Change of mind, business obligations and pre-existing conditions are not covered.

If an illness causes a traveler to miss a European tour, any prepayments or deposits made would be covered under trip cancellation insurance. If luggage disappears from the tour bus in Jamaica, personal effects coverage would reimburse for lost items. And if a ski adventure goes downhill too fast, emergency medical assistance coverage would pay for a medical evacuation.

But travel insurance is not for everyone. Many consumers may already have coverage under their life, health, homeowners' insurance policies or credit card benefits. Because basic travel insurance can average 5-to-8 percent of the cost of the trip, consumers should review the coverage they already have to be sure it is not duplicated.

The decision to purchase insurance also depends on the kind of travel planned. If it involves a large down payment, insurance can make sense for travelers. It may provide for reimbursement for nonrefundable, prepaid expenses like airfare, hotels, tour packages and cruises if either the consumer or travel supplier cancels.

As with all contracts, consumers are advised to read their travel insurance policy thoroughly. While most policies let the insured cancel because of an illness, injury or death in the family, policies' definition of "family" may vary.